I have a buyer who was supposed to close on a Franklin TN condo purchase back on December 19. Needless to say, that didn't happen because the lender was still waiting to hear back from their condo review department. Since the sellers were going out of town for Christmas, we extended the closing until 12/30; 11 days later.
As luck would have it, the condo association made an insurance company change after our original close date. Because they thought we had already closed on this condo, they didn't provide the lender with a new Certificate of Liability from the new insurance company. And wouldn't you know it, the insurance company was completely shut down between December 24 until January 2.
We were forced to ask the seller for another extension until January 3. We were finally able to get the insurance certificate on January 2 and I thought the closing would occur on January 3.
When I hadn't heard anything from the lender by 11 a.m. on January 3, I called them. They had requested additional payroll documents dating back to October 1 earlier that morning and couldn't close until those documents had been received and reviewed. What?
Now, understand. They had previously told us the only documentation they were waiting for was the insurance certificate. However, when they received that, they suddenly needed more documentation from the buyer's employer. Why didn't they ask for the documents needed from the employer during the 14 days that we were waiting on insurance documents.
Of course, the employer wasn't able to comply in time to close on January 3. When I asked the lender what date to request on our third extension, she told me to use January 9. What? Another 6 days?
I called my preferred lender to see how long it would take to close on this property. He told me 8 days. I contacted my buyer and suggested we make a lender change. (I'm kicking myself for not suggesting this back on December 19.) She was all for it.
I then contacted my client's current lender and told her if they can't close this deal on Monday, my client is going with a different lender. She said that would be a foolish thing to do because it will take a new lender 21 days to complete the process. I respectfully disagreed and told her I'd already spoken with my preferred lender and he told me 8 days. I then reminded her that she had just asked for an additional 6 days which would put us three weeks after our original close date.
It's unbelievable to me that we still haven't closed on this property. Thank goodness it's not a stacked closing or my client would have lost the condo.
I highly doubt my client's current lender will actually close this on Monday so we've already begun the process with the second lender. What do you think about this whole thing?
How long do you extend grace to a lender before you jump ship?
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